Congress gave the IRS $79.4B to modernize. Over half is already gone.
Summary
The Inflation Reduction Act of 2022 appropriated about $79.4 billion for the IRS to fund a sweeping transformation -- new technology, better taxpayer service, stronger enforcement. GAO's June 24, 2026 letter to the Treasury Secretary found that subsequent laws have already rescinded or blocked IRS from spending over half of it, and that the two internal offices responsible for the transformation and the taxpayer-experience push were both disbanded in the spring of 2025, with IRS still deciding which projects to keep. The follow-through problem isn't new: IRS's own five-year rate for implementing GAO recommendations is 72%, five points below the 77% government-wide average GAO reported the same month, and the agency now carries 238 open recommendations, 27 of them priority -- up from 26 in September 2025, even after IRS closed one. Enforcement of tax laws, including the tax gap those recommendations are meant to help close, has sat on GAO's High-Risk List since 1990.
Half the money, gone before it's spent
Subsequent laws have rescinded or prevented IRS from spending over half⧉ of the $79.4 billion, starting with the Fiscal Responsibility Act of 2023 and continuing through follow-on laws into 2026. The President's fiscal year 2027 budget proposal recommends further reductions in funding and, according to , similarly signals that is reevaluating its own modernization plan.
The offices meant to run it don't exist anymore
In March 2025, officials told that the office leading its transformation had been disbanded⧉ and that the agency was still deciding which IRA projects to continue and who would lead them. A month later, officials said the same thing about the office overseeing 's taxpayer-experience improvements: disbanded in April 2025, with those projects now being reassessed given funding and staffing limits.
A slower-than-average track record on fixing the rest
The follow-through problem predates the disbandings. GAO reported in January 2026⧉ that 77% of its recommendations made five years earlier had been implemented government-wide; 's own five-year rate was 72%. As of June 2026, carries 238 open recommendations, including 27 designates priority -- up from 26 in its September 2025 letter, even after fully implemented one of those in the interim; added two new priority recommendations in the meantime.
View data as table
| Government-wide | 77% |
|---|---|
| IRS | 72% |
View data as table
| Sept. 2025 | 26 |
|---|---|
| June 2026 | 27 |
View data as table
| Priority | 27 |
|---|---|
| Other open | 211 |
Underneath it all, a 36-year-old warning
Tax law enforcement -- including closing the tax gap the transformation money was partly meant to address -- has been on GAO's High-Risk List since 1990⧉. 's open recommendations trace specific pieces of that risk: a January 2024 finding that lost a significant share of the staff who audit high-income and high-wealth taxpayers, and a July 2025 recommendation -- echoing one first made in 2020 -- that build an evidence-based way to measure whether its taxpayer-service improvements actually work.
The takeaway
- More than half of a $79.4 billion transformation fund is already rescinded or blocked. Congress earmarked the money in 2022; subsequent laws through 2026 have clawed back or frozen over half of it, and the FY2027 budget proposes cutting funding further still.
- Both offices responsible for spending it have been disbanded. The transformation office (March 2025) and the taxpayer-experience office (April 2025) are both gone, with still sorting out which projects survive.
- 's own recommendation follow-through lags the government-wide average. A 72% five-year implementation rate versus 77% government-wide, 238 open recommendations including 27 calls priority, and a tax-enforcement High-Risk designation now in its 36th year all describe the same pattern: identified fixes that don't get finished.
All findings are from -26-108992, "Priority Open Recommendations: Internal Revenue Service," a letter from Acting Comptroller General Cardell Johnson to Treasury Secretary Scott Bessent dated June 24, 2026 and publicly released July 1, 2026 -- read directly in full. This is part of 's annual priority-open-recommendations letter series, begun in 2015; the underlying audits cites (on transformation reform practices, high-income audit staffing, and taxpayer-experience measurement) were not separately re-verified here.
Sources(1) ▾
- U.S. Government Accountability Office, Priority Open Recommendations: Internal Revenue Service (2026-06-24) — -26-108992, letter from Acting Comptroller General Cardell Johnson to Treasury Secretary Scott Bessent, dated June 24, 2026 and publicly released July 1, 2026 -- the annual priority-open-recommendations letter for the . Read the full 3-page letter directly (extracted with pdftotext -layout); the Highlights/Fast-Facts summary the Artemis capture stored omits the $79.4 billion IRA figure, the rescission finding, the two disbanded-office findings, and the 72%-vs-77% implementation-rate comparison, all of which are only in the letter body. Direct gao.gov PDF asset access intermittently returns HTTP 403; a Wayback Machine capture of the direct PDF asset serves as the one-click original-document link. gao.gov · original document
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The Inflation Reduction Act of 2022 appropriated about $79.4 billion⧉ for the to fund a sweeping transformation of its technology, taxpayer service, and enforcement, laid out in the agency's 2023 Strategic Operating Plan. 's June 24, 2026 priority-recommendations letter to the Treasury Secretary found the money and the machinery meant to spend it are both in trouble.